Updated from 12:21 p.m. EST to provide closing price.

NEW YORK ( TheStreet) -- Like the rest of the market, Apple ( AAPL) was under pressure. Shares dropped below $400 for the first time since April as one research firm chopped its earnings estimates, citing worries over iPhone sales.

Jefferies analyst Peter Misek lowered his price target to $405 on the Cupertino, Calif.-based tech giant, and lowered third- and fourth-quarter earnings estimates on higher-than-normal iPhone inventories. He now expects Apple to earn $7.02 a share on $36.6 billion in revenue in the calendar third quarter, and $10.58 a share in earnings on $48.3 billion in revenue during the fourth quarter.

"Our checks indicate broad-based iPhone build plan cuts, which followed our checks last week indicating retail/carrier smartphone inventory levels are at ~10 weeks (vs. typical 4-6)," Misek wrote in a note.

Analysts polled by Thomson Reuters expect Apple to earn $8.27 a share on $38.2 billion in revenue during the calendar third quarter, and $13.74 a share on $56.3 billion during the fourth quarter.

Shares last closed below $400 April 18, when they closed at $392.05. The 52-week for the stock is $385.10, reached a day later.

The concern is that the iPhone, which Apple is expected to refresh later this year with the iPhone 5S, is seeing a huge drop off in customer appeal, with inventories high for both the iPhone and Samsung Galaxy S 3 in certain U.K. cell phone carriers, including Orange, Vodafone, and EE. Misek noted that build plans for the third and fourth quarters were cut notably. The third quarter was taken from a range of 40 million to 45 million units to 25 million to 30 million, and the fourth quarter was taken from 60 million to 65 million unitd to 50 million to 55 million.

Samsung's Galaxy S 3 uses Google's ( GOOG) Android operating system.

Apple is expected to begin sending out instructions to start assembling the iPhone 5S; it hasn't started yet but it expected to very soon. "Trial production and tape-outs are most likely occurring now," Misek said in his note. "We believe the iPhone 5S and low-cost iPhone will most likely launch in Sep and that pushouts are more likely than pull-ins."

Shares closed the session just above the $400 level, closing at $402.29, off 2.71% on the session.

-- Written by Chris Ciaccia in New York

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